MONTEVIDEO, May 14 (Reuters) – Uruguay awarded French gas and power group GDF Suez SA a contract to build a liquefied natural gas (LNG) regasification plant at an estimated cost of $1.125 billion, the government said on Tuesday.

The plant in the port of Montevideo will have a processing capacity of up to 10 million cubic meters of LNG per day. It will help diversify energy sources in Uruguay, which is highly dependent on oil imports, and supply the Argentine market.

The plant is expected to be operating by the first quarter of 2015. Initially, it will receive each year eight cargos with capacity of 150,000 cubic meters of LNG each.

“The recommendation is to award Suez the construction of the regasification terminal … with a total investment, between the bidding process and other related work, of $1.125 billion,” Uruguay’s industry and energy minister, Roberto Kreimerman, told a news conference.

Uruguay will pay the French company $14 million a month during the 20-year concession.

Spain’s Enagas, Norway’s Hoegh LNG Holdings and a consortium formed by KoreaGas Corp and Samsung Heavy Industries Co had also submitted bids to build the plant.

The project will require building a breakwater and connecting the plant to the country’s network of gas pipelines. The LNG regasification vessel will be rented at first but Suez will incorporate a new vessel during the project’s second phase.

The terminal will have a storage capacity of 267 million cubic meters.

Uruguay consumes just 300,000 cubic meters of natural gas per day.

The country plans to export part of the LNG to neighboring Argentina, which has had to buy more natural gas from abroad to make up for dwindling resources at home. Argentina plans to secure about 80 LNG cargos this year alone.